Notes on American life from American history.

Posts Tagged ‘insurance’

For such a smart guy, New York Times “Upshot” Editor David Leonhardt made a surprising goof in the July 15th issue, writing, “When the federal government is good, it’s very, very good. When it’s bad (or at least deeply inefficient), it’s the norm.” One can understand how the goof – the snarky comment about “the norm” – happened. Leonhardt was focusing on special, targeted initiatives for the poor, many of which fail. But he missed the forest for the trees — or the government for the programs.

Americans commonly do not notice the successful operation of government, including the federal level; they, too, snarkily diss government. They do not notice the success because, like air, is all around them and taken for granted. To say government is generally successful is, of course, not to say government operations are optimal. We should strive for A-grade performance, not settle for B grades. Moreover, there is evidence to suggest that attaining A grades for the government would call for more of it.

The furious to-do about Obamacare has obscured a basic fact about modern Americans: Most of us, certainly the middle class, are sheltered by a complex web of insurance. Some insurance coverage is privately provided, such as life, accident, fire, flood, travel, liability, burial, and consumer product insurance. And some is government-provided or -required: Social Security, Medicare, unemployment, bank deposit, car, health, mortgage, food, crop, disaster insurance, and so on. All of these, without which American middle-class life as we know it would not be recognizable, are relatively recent developments. It is not that insurance per se and even complex versions of it are new; merchants have hedged their commercial gambles for millennia. What is new in the last roughly 150 years is the extent to which average people have gotten access to financial devices which, by sharing risks, have reduced the economic uncertainties in their lives.

This development, told in part by historian Jonathan Levy in an a multiple award-winning 2012 book, Freaks of Fortune: The Emerging World of Capitalism and Risk in America, was not without political and moral controversy. Moreover, the consequences of reducing individual Americans’ insecurity have more than once introduced great national economic uncertainty.

We commonly say that lives are invaluable, that saving a life, any life, is worth any effort, any expense. But we do not mean it.

This note is prompted by a recent article on the consequences of raising the speed limits on American highways. The authors estimated that in the decade after 1995, states’ decisions to raise posted speeds increased road fatalities by over 3% — over 12,000 additional deaths. That’s about quadruple the death toll of 9/11. Yet, it is clear that Americans wanted and still want to drive that extra 10 or so miles per hour faster. What does that show about how invaluable each life is?

How much we consider a human life worth has increased substantially over the last century, by one estimate about 30-fold. Yet, we do not spend all we can to save a life. Moreover, how much we do spend to save a life is inconstant and fickle, rather than thought-out and planned; the number typically depends on whose life we are saving. The question is whether we can and will make studied decisions based on how we actually value a life.

Q: What do all these headlines have in common, besides being tales of woe? A: That the people injured physically or economically by these woes are helped, often made financially whole. Better yet, many more people who could have been in the same scrapes – killed, injured, broke, homeless, or just recently, endangered by salmonella in eggs – are protected from those threats. By whom? By your insurer of last resort: Uncle Sam.

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* 2010 winner, PROSE Award for U.S. History, American Association of Publishers.
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